BILL NUMBER: AB 649	CHAPTERED  09/11/00

	CHAPTER   402
	FILED WITH SECRETARY OF STATE   SEPTEMBER 11, 2000
	PASSED THE ASSEMBLY   AUGUST 25, 2000
	PASSED THE SENATE   JUNE 15, 2000
	AMENDED IN SENATE   JUNE 8, 2000
	AMENDED IN SENATE   JUNE 5, 2000
	AMENDED IN SENATE   MAY 24, 2000

INTRODUCED BY   Assembly Members Machado and Strom-Martin
   (Principal coauthors:  Senators Chesbro and Ortiz)

                        FEBRUARY 23, 1999

   An act to amend Section 1094.5 of the Code of Civil Procedure, to
add Sections 22508.6, 22717.5, and 22801.5 to the Education Code, to
amend Sections 18670, 19175, 19582, 19816.20, 19876.5, 20395,
20405.1, 21159, 21160, 21161, 21195, and 22825.01 of, to add Sections
19576.6, 20309.5, and 20407.5 to, and to repeal Section 22754.2 of,
the Government Code, and to amend Section 10295 of the Public
Contract Code, relating to state employees, making an appropriation
therefor, and declaring the urgency thereof, to take effect
immediately.

      (Approved by Governor September 11, 2000.  Filed with
Secretary of State September 11, 2000.)

   On this date I have signed AB 649 with a reduction.
   This bill would appropriate funding for various programs agreed to
during collective bargaining.  However, the appropriation in this
bill for the special fund deficiency is in excess of the amount
needed to fund the employee compensation increases agreed to through
collective bargaining.  Therefore, I am reducing the special fund
appropriation contained in this bill by $17,000,000 to reflect the
actual amount needed to fund the employee compensation increases.
The revised appropriation shall be $30,600,000.
                                                 GRAY DAVIS, Governor


	LEGISLATIVE COUNSEL'S DIGEST


   AB 649, Machado.  State employees.
   (1) Under existing law, members of the Defined Benefit Program of
the State Teachers' Retirement Plan who become employed by any of a
list of other public employers to perform service that requires
membership in a different public retirement system, may elect to be
excluded from membership in that different system and continue to
have their service subject to their existing system.
   This bill would make this election available to members of the
State Teachers' Retirement System who became employed by the state,
during a specified period, to perform service subject to Second Tier
benefits in the Public Employees' Retirement System and who satisfy
certain requirements.  The bill would require persons making that
election to make specified contributions to the Teachers' Retirement
Fund with respect to their pre-election state service and would also
require specified assets to be transferred from the Public Employees'
Retirement System to that fund on account of that state service,
thereby making an appropriation to the Teachers' Retirement Fund, a
continuously appropriated fund.
   (2) Under existing law, members of the Defined Benefit Program of
the State Teachers' Retirement Plan are entitled to service credit at
service retirement for accumulated and unused leave of absence for
illness or injury, as specified.
   This bill would provide that members who are eligible state
employees and who retire on or after January 1, 2000, shall receive,
subject to the terms of a memorandum of understanding or the
authorization of the Department of Personnel Administration, service
credit at service retirement for accumulated unused leave of absence
for education, as specified.
   (3) Existing law includes procedures for disciplining state
employees, including State Personnel Board investigations and
hearings, the review of administrative decisions, and suspensions.
   This bill would provide that certain of these procedures do not
apply to state employees in State Bargaining Unit 11 who have been
disciplined for positive drug test results and who expressly waive
appeal to the State Personnel Board and invoke arbitration
proceedings pursuant to a collective bargaining agreement.  The bill
would require the state employer, if the collective bargaining
agreement has expired and an answer has been filed, to follow the
appeal procedures contained in the expired memorandum of
understanding for state employees in State Bargaining Unit 11 until a
successor agreement is negotiated.
   (4) Existing law, the Public Employees' Retirement Law,
establishes the Public Employees' Retirement System, and sets forth
the provisions for its administration and the delivery of benefits to
its members.  Member contributions to the Public Employees'
Retirement System are deposited into the Public Employees' Retirement
Fund, which is a continuously appropriated fund.  Existing law
includes in the state safety membership category state employees in
state bargaining units that have agreed in a memorandum of
understanding between the state employer and the recognized employee
organization that the classifications or positions of these state
employees are found to meet specified state safety membership
criteria, if the Department of Personnel Administration has agreed to
their inclusion.  Existing law excludes from the state peace
officer/firefighter membership category security officers employed by
the Department of Justice.
   This bill would include state employees excluded from the Ralph C.
Dills Act and officers or employees of the executive branch of state
government who are not members of the civil service within the
classification of state safety members, if the department has
approved their inclusion, and would delete the exclusion of security
officers employed by the Department of Justice from the
classification of state peace officer/firefighter members.  To the
extent the bill would enlarge the class of persons eligible for state
safety or state peace officer/firefighter membership, it would make
an appropriation by increasing the amount of contributions to the
Public Employees' Retirement Fund.
   (5) Existing law establishes the Rural Health Care Equity Trust
Fund, which is administered by the Department of Personnel
Administration to provide subsidies and reimbursements for certain
health care premiums and health care costs incurred by state
employees and annuitants in rural areas on or after January 1, 2000.
The fund ceases to be operative on January 1, 2005, or earlier, as
specified.  Existing law requires each fund in the State Treasury to
reimburse the General Fund for specified contributions to the Rural
Health Care Equity Trust Fund for the employees and annuitants paid
from each fund.
   This bill would change references to the fund to the Rural Health
Care Equity Program and specify the means by which the General Fund
reimbursements are to be made.
   (6) Existing law, the Public Employees' Retirement Law, provides
increased industrial disability retirement benefits for certain state
membership categories who are incapacitated for the performance of
their present duties as a result of injury or illness arising out of
and in the course of their employment on or after January 1, 1993.
   This bill would provide that these provisions do not apply to a
job-related or job-incurred illness or injury that occurs on or after
January 1, 2000.  The bill would declare the intent of the
Legislature that these provisions be given retroactive effect to
January 1, 2000.
   (7) Under the Public Employees' Retirement Law, specified officers
and employees of the State Department of Mental Health are
classified as state safety members, however, those members have the
option to irrevocably elect, within a specified time period, to
remain subject to the miscellaneous membership classification.
   This bill would provide that a specified group of those officers
and employees who elected to remain subject to the miscellaneous
membership classification shall have the right to elect to become
safety members, as specified.
   (8) Existing law, the Public Employees' Medical and Hospital Care
Act, provides health benefits plan coverage to public employees and
annuitants meeting the eligibility requirements prescribed by the
Board of Administration of the Public Employees' Retirement System.
   This bill would revise the definition of "eligible employees" for
the purposes of the act to delete a definition applicable only to
state employees in State Bargaining Unit 19.
   (9) Existing law, with specified exceptions, provides that all
contracts entered into by any state agency for the hiring or purchase
of goods and services, including equipment, supplies, textbooks, and
repair or maintenance, are void unless approved by the Department of
General Services.  Contracts entered into by the Department of
Personnel Administration for employee benefits, occupational health
and safety, training services, or any combination thereof, for state
employees in state bargaining units that have agreed to this
exemption in a memorandum of understanding are exempt from this
approval requirement.
   This bill would revise this provision to make it applicable to all
contracts, with specified exceptions, entered into by any state
agency for the acquisition of goods and services.  The bill would
expand the exemption for contracts entered into by the Department of
Personnel Administration for employee benefits, occupational health
and safety, training services, and any combination thereof, for state
employees, as specified.
   (10) This bill would appropriate $65,414,288 from the General Fund
and unallocated special funds, in specified amounts, for allocation
for various state employee benefits or programs, including state
employee compensation, the Work and Family Fund, and the Rural Area
Health Subsidy Program.
   (11) This bill would incorporate additional changes in Section
10295 of the Public Contract Code proposed by AB 1441, to become
operative if both this bill and AB 1441 are enacted and become
effective on or before January 1, 2001, and this bill is enacted
last.
  (12) This bill would declare that it is to take effect immediately
as an urgency statute.
   Appropriation:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 1094.5 of the Code of Civil Procedure is
amended to read:
   1094.5.  (a) Where the writ is issued for the purpose of inquiring
into the validity of any final administrative order or decision made
as the result of a proceeding in which by law a hearing is required
to be given, evidence is required to be taken, and discretion in the
determination of facts is vested in the inferior tribunal,
corporation, board, or officer, the case shall be heard by the court
sitting without a jury.  All or part of the record of the proceedings
before the inferior tribunal, corporation, board, or officer may be
filed with the petition, may be filed with respondent's points and
authorities, or may be ordered to be filed by the court.  Except when
otherwise prescribed by statute, the cost of preparing the record
shall be borne by the petitioner.  Where the petitioner has proceeded
pursuant to Section 68511.3 of the Government Code and the Rules of
Court implementing that section and where the transcript is necessary
to a proper review of the administrative proceedings, the cost of
preparing the transcript shall be borne by the respondent.  Where the
party seeking the writ has proceeded pursuant to Section 1088.5, the
administrative record shall be filed as expeditiously as possible,
and may be filed with the petition, or by the respondent after
payment of the costs by the petitioner, where required, or as
otherwise directed by the court.  If the expense of preparing all or
any part of the record has been borne by the prevailing party, the
expense shall be taxable as costs.
   (b) The inquiry in such a case shall extend to the questions
whether the respondent has proceeded without, or in excess of
jurisdiction; whether there was a fair trial; and whether there was
any prejudicial abuse of discretion.  Abuse of discretion is
established if the respondent has not proceeded in the manner
required by law, the order or decision is not supported by the
findings, or the findings are not supported by the evidence.
   (c) Where it is claimed that the findings are not supported by the
evidence, in cases in which the court is authorized by law to
exercise its independent judgment on the evidence, abuse of
discretion is established if the court determines that the findings
are not supported by the weight of the evidence.  In all other cases,
abuse of discretion is established if the court determines that the
findings are not supported by substantial evidence in the light of
the whole record.
   (d) Notwithstanding subdivision (c), in cases arising from private
hospital boards or boards of directors of districts organized
pursuant to The Local Hospital District Law, Division 23 (commencing
with Section 32000) of the Health and Safety Code or governing bodies
of municipal hospitals formed pursuant to Article 7 (commencing with
Section 37600) or Article 8 (commencing with Section 37650) of
Chapter 5 of Division 3 of Title 4 of the Government Code, abuse of
discretion is established if the court determines that the findings
are not supported by substantial evidence in the light of the whole
record.  However, in all cases in which the petition alleges
discriminatory actions prohibited by Section 1316 of the Health and
Safety Code, and the plaintiff makes a preliminary showing of
substantial evidence in support of that allegation, the court shall
exercise its independent judgment on the evidence and abuse of
discretion shall be established if the court determines that the
findings are not supported by the weight of the evidence.
   (e) Where the court finds that there is relevant evidence that, in
the exercise of reasonable diligence, could not have been produced
or that was improperly excluded at the hearing before respondent, it
may enter judgment as provided in subdivision (f) remanding the case
to be reconsidered in the light of that evidence; or, in cases in
which the court is authorized by law to exercise its independent
judgment on the evidence, the court may admit the evidence at the
hearing on the writ without remanding the case.
   (f) The court shall enter judgment either commanding respondent to
set aside the order or decision, or denying the writ.  Where the
judgment commands that the order or decision be set aside, it may
order the reconsideration of the case in the light of the court's
opinion and judgment and may order respondent to take such further
action as is specially enjoined upon it by law, but the judgment
shall not limit or control in any way the discretion legally vested
in the respondent.
   (g) Except as provided in subdivision (h), the court in which
proceedings under this section are instituted may stay the operation
of the administrative order or decision pending the judgment of the
court, or until the filing of a notice of appeal from the judgment or
until the expiration of the time for filing the notice, whichever
occurs first.  However, no such stay shall be imposed or continued if
the court is satisfied that it is against the public interest.  The
application for the stay shall be accompanied by proof of service of
a copy of the application on the respondent.  Service shall be made
in the manner provided by Title 5 (commencing with Section 405) of
Part 2 or Chapter 5 (commencing with Section 1010) of Title 14 of
Part 2.  If an appeal is taken from a denial of the writ, the order
or decision of the agency shall not be stayed except upon the order
of the court to which the appeal is taken.  However, in cases where a
stay is in effect at the time of filing the notice of appeal, the
stay shall be continued by operation of law for a period of 20 days
from the filing of the notice.  If an appeal is taken from the
granting of the writ, the order or decision of the agency is stayed
pending the determination of the appeal unless the court to which the
appeal is taken shall otherwise order.  Where any final
administrative order or decision is the subject of proceedings under
this section, if the petition shall have been filed while the penalty
imposed is in full force and effect, the determination shall not be
considered to have become moot in cases where the penalty imposed by
the administrative agency has been completed or complied with during
the pendency of the proceedings.
   (h) (1) The court in which proceedings under this section are
instituted may stay the operation of the administrative order or
decision of any licensed hospital or any state agency made after a
hearing required by statute to be conducted under the Administrative
Procedure Act, as set forth in Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code,
conducted by the agency itself or an administrative law judge on the
staff of the Office of Administrative Hearings pending the judgment
of the court, or until the filing of a notice of appeal from the
judgment or until the expiration of the time for filing the notice,
whichever occurs first.  However, the stay shall not be imposed or
continued unless the court is satisfied that the public interest will
not suffer and that the licensed hospital or agency is unlikely to
prevail ultimately on the merits.  The application for the stay shall
be accompanied by proof of service of a copy of the application on
the respondent.  Service shall be made in the manner provided by
Title 5 (commencing with Section 405) of Part 2 or Chapter 5
(commencing with Section 1010) of Title 14 of Part 2.
   (2) The standard set forth in this subdivision for obtaining a
stay shall apply to any administrative order or decision of an agency
that issues licenses pursuant to Division 2 (commencing with Section
500) of the Business and Professions Code or pursuant to the
Osteopathic Initiative Act or the Chiropractic Initiative Act.  With
respect to orders or decisions of other state agencies, the standard
in this subdivision shall apply only when the agency has adopted the
proposed decision of the administrative law judge in its entirety or
has adopted the proposed decision but reduced the proposed penalty
pursuant to subdivision (b) of Section 11517 of the Government Code;
otherwise the standard in subdivision (g) shall apply.
   (3) If an appeal is taken from a denial of the writ, the order or
decision of the hospital or agency shall not be stayed except upon
the order of the court to which the appeal is taken.  However, in
cases where a stay is in effect at the time of filing the notice of
appeal, the stay shall be continued by operation of law for a period
of 20 days from the filing of the notice. If an appeal is taken from
the granting of the writ, the order or decision of the hospital or
agency is stayed pending the determination of the appeal unless the
court to which the appeal is taken shall otherwise order.  Where any
final administrative order or decision is the subject of proceedings
under this section, if the petition shall have been filed while the
penalty imposed is in full force and effect, the determination shall
not be considered to have become moot in cases where the penalty
imposed by the administrative agency has been completed or complied
with during the pendency of the proceedings.
   (i) Any administrative record received for filing by the clerk of
the court may be disposed of as provided in Sections 1952, 1952.2,
and 1952.3.
   (j) Effective January 1, 1996, this subdivision shall apply to
state employees in State Bargaining Unit 5.  This subdivision shall
apply to state employees in State Bargaining Unit 8.  For purposes of
this section, the court is not authorized to review any disciplinary
decisions reached pursuant to Section 19576.1 or 19576.5 of the
Government Code.
   (k) This section shall not apply to state employees in State
Bargaining Unit 11 disciplined or rejected on probation for positive
drug test results who expressly waive appeal to the State Personnel
Board and invoke arbitration proceedings pursuant to a State
Bargaining Unit 11 collective bargaining agreement.
  SEC. 2.  Section 22508.6 is added to the Education Code, to read:
   22508.6.  (a) Any person who is a member of the Defined Benefit
Program and who subsequently became employed and continues to be
employed by the state to perform service that requires membership in
the Public Employees' Retirement System and who meets the
requirements of subdivision (b) may elect to have that state service
subject to coverage by the Defined Benefit Program and excluded from
coverage by the Public Employees' Retirement System.
   (b) (1) Only a person who has achieved program vesting shall be
eligible to make the election under this section.
   (2) A person is eligible to make the election if he or she left
employment with a school district, county superintendent of schools,
or community college district and began employment with the state
within 30 days without any intervening employment and that change in
employment occurred on or after July 1, 1991, and prior to the
effective date of this section.
   (3) A person is eligible to make the election if, at the time of
the election, he or she is a member of the Public Employees'
Retirement System subject to Second Tier benefits and is one of the
following:
   (A) Represented by a State Bargaining Unit that has agreed by a
memorandum of understanding to become subject to Section 20309.5 of
the Government Code.
   (B) Excluded from the definition of "state employee" in
subdivision (c) of Section 3513 of the Government Code, but
performing, supervising, or managing work similar to work performed
by employees described in subparagraph (A).
   (C) In a position not covered by civil service and in the
executive branch of government, but performing, supervising, or
managing work similar to work performed by employees described in
subparagraph (A).
   (c) The election under this section shall be made in writing to
each system within 90 days after the effective date of this section
or within 60 days after the eligible member is notified by the system
of his or her right to make the election, whichever is later.  The
member's election shall be effective on the day following the date on
which the election is received by the Public Employees' Retirement
System.
   (d) If the election is made, the state service performed from and
after the date of the election shall be considered creditable service
for purposes of this part and the provisions of Section 22801.5
shall be applicable with respect to service performed prior to that
date.
  SEC. 3.  Section 22717.5 is added to the Education Code, to read:
   22717.5.  (a) A member shall be credited at service retirement for
each day of accumulated and unused leave of absence for education
for which full salary is allowed on the member's final day of
employment with the state.
   (b) The amount of service credit to be granted shall be 0.004
years of service for each unused day of educational leave credit.
   (c) When the member has made application for service retirement
under this part, the employer shall certify to the board, within 30
days following the effective date of the member's service retirement,
the number of days of accumulated and unused leave of absence for
education that the member was entitled to on the final day of
employment.  The board may assess a penalty on delinquent reports.
   (d) This section shall apply to eligible state employees in state
bargaining units that have agreed to this section in a memorandum of
understanding, or as authorized by the Director of the Department of
Personnel Administration for classifications of state employees that
are excluded from the definition of "state employee" by paragraph (c)
of Section 3513 of the Government Code.
   (e) The provisions of this section shall be effective for eligible
members who retire directly from state employment on or after
January 1, 2000.
  SEC. 4.  Section 22801.5 is added to the Education Code, to read:
   22801.5.  (a) A member who elects pursuant to Section 22508.6 to
have his or her state service subject to coverage by the Defined
Benefit Program shall receive additional service credit for the time
spent subject to coverage by the Public Employees' Retirement System
between July 1, 1991, and the effective date of the election.
   (b) A member described in subdivision (a) shall pay all
contributions with respect to his or her state service as a member of
the Public Employees' Retirement System at the contribution rate for
additional service credit, adopted by the board as a plan amendment,
in effect at the time of the election.  Contributions shall be made
in a lump sum or in not more than 120 monthly installments.  Payment
shall be made or shall commence within 120 days after the date of the
election.  No installment, except the final installment, shall be
less than twenty-five dollars ($25).  The member shall not be
credited with any service pursuant to this section until the
contributions have been paid in full.
   (c) If the member is employed to perform creditable service at the
time of the election, the contributions shall be based upon the
compensation earnable in the current school year or either of the two
immediately preceding school years, whichever is highest.
   (d) If the member is not employed to perform creditable service at
the time of the election, the contributions shall be based upon the
compensation earnable in the last school year of credited service or
either of the two immediately preceding school years, whichever is
highest.
   (e) The total amount of contributions due from the member under
subdivision (b) shall be reduced by the amount received from the
Public Employees' Retirement System pursuant to Section 20309.5 of
the Government Code.  Under no circumstances shall the assets
received from the Public Employees' Retirement System, pursuant to
that section, be allocated or awarded to individual members or their
spouses or beneficiaries.
  SEC. 5.  Section 18670 of the Government Code is amended to read:
   18670.  (a) The board may hold hearings and make investigations
concerning all matters relating to the enforcement and effect of this
part and rules prescribed under this part.  It may inspect any state
institution, office, or other place of employment affected by this
part to ascertain whether this part and the board rules are obeyed.
   The board shall make investigations and hold hearings at the
direction of the Governor or the Legislature or upon the petition of
an employee or a citizen concerning the enforcement and effect of
this part and to enforce the observance of Article VII of the
Constitution and of this part and the rules made under this part.
   (b) Effective January 1, 1996, this subdivision shall apply only
to state employees in State Bargaining Unit 5.  For purposes of
subdivision (a), any discipline, as defined by Section 19576.1, is
not subject to either a board investigation or hearing.  Board review
shall be limited to acceptance or rejection of discipline imposed
pursuant to Section 19576.1.
   (c) This subdivision shall apply only to state employees in State
Bargaining Unit 8.  For the purposes of subdivision (a), any
discipline, as defined by the memorandum of understanding or Section
19576.5, is not subject to either a board investigation or hearing.
   (d) This subdivision shall apply only to state employees in State
Bargaining Unit 11 who have been disciplined or rejected on probation
for positive drug test results and who expressly waive appeal to the
State Personnel Board and invoke arbitration proceedings pursuant to
a collective bargaining agreement.  For purposes of subdivision (a)
and in the context of positive drug test results, any discipline, as
defined by the memorandum of understanding, and rejections on
probation are not subject to either a board investigation or a
hearing.
  SEC. 6.  Section 19175 of the Government Code is amended to read:
   19175.  The board at the written request of a rejected
probationer, filed within 15 calendar days of the effective date of
rejection, may investigate with or without a hearing the reasons for
rejection.  After investigation, the board may do any of the
following:
   (a) Affirm the action of the appointing power.
   (b) Modify the action of the appointing power.
   (c) Restore the name of the rejected probationer to the employment
list for certification to any position within the class; provided,
that his or her name shall not be certified to the agency by which he
or she was rejected, except with the concurrence of the appointing
power of that agency.
   (d) Restore him or her to the position from which he or she was
rejected, but this shall be done only if the board determines, after
a hearing, that there is no substantial evidence to support the
reason or reasons for rejection, or that the rejection was made in
fraud or bad faith.  At  the hearing, the rejected probationer shall
have the burden of proof.  Subject to rebuttal by the rejected
probationer, it shall be presumed that the rejection was free from
fraud and bad faith and that the statement of reasons therefor in the
notice of rejection is true.
   (e) Effective January 1, 1996, this section shall not apply to
state employees in State Bargaining Unit 5.
   (f) Except as provided in subdivision (g), this section shall not
apply to state employees in State Bargaining Unit 11 who have been
rejected on probation for positive drug test results and who
expressly waive appeal to the State Personnel Board and invoke
arbitration proceedings pursuant to a collective bargaining
agreement.
   (g) Whenever a written request is made under this section by a
probationer in State Bargaining Unit 11 who has been rejected for
positive drug test results and the memorandum of understanding for
employees in State Bargaining Unit 11 has expired, the state employer
shall follow the appeal procedures contained in the expired
memorandum of understanding for state employees in State Bargaining
Unit 11 until a successor agreement is negotiated between the
Department of Personnel Administration and the exclusive
representative.
  SEC. 7.  Section 19576.6 is added to the Government Code, to read:

   19576.6.  This section shall apply only to state employees in
State Bargaining Unit 11 who have been disciplined for positive drug
test results and who expressly waive appeal to the State Personnel
Board and invoke arbitration proceedings pursuant to a collective
bargaining agreement.
   (a) Notwithstanding Section 19576, the State Personnel Board shall
not have the authority stated in subdivision (a) of that section.
   (b) Whenever an answer is filed by an employee and the memorandum
of understanding for employees in State Bargaining Unit 11 has
expired, the state employer shall follow the appeal procedures
contained in the expired memorandum of understanding for state
employees in State Bargaining Unit 11 until a successor agreement is
negotiated between the Department of Personnel Administration and the
exclusive representative.
   (c) Notwithstanding any other law or rule, if the provisions of
this section are in conflict with the provisions of the memorandum of
understanding reached pursuant to Section 3517.5, the memorandum of
understanding shall be controlling without further legislative
action, except that if the provisions of the memorandum of
understanding require the expenditure of funds, the provisions shall
not become effective unless approved by the Legislature in the annual
Budget Act.
  SEC. 8.  Section 19582 of the Government Code is amended to read:
   19582.  (a) Hearings may be held by the board, or by any
authorized representative, but the board shall render the decision
that in its judgment is just and proper.
   During a hearing, after the appointing authority has completed the
opening statement or the presentation of evidence, the employee,
without waiving his or her right to offer evidence in the event the
motion is not granted, may move for a dismissal of the charges.
   If it appears that the evidence presented supports the granting of
the motion as to some but not all of the issues involved in the
action, the board or the authorized representative shall grant the
motion as to those issues and the action shall proceed as to the
issues remaining.  Despite the granting of the motion, no judgment
shall be entered prior to a final determination of the action on the
remaining issues, and shall be subject to final review and approval
by the board.
   (b) If a contested case is heard by an authorized representative,
he or she shall prepare a proposed decision in a form that may be
adopted as the decision in the case.  A copy of the proposed decision
shall be filed by the board as a public record and furnished to each
party within 10 days after the proposed decision is filed with the
board.  The board itself may adopt the proposed decision in its
entirety, may remand the proposed decision, or may reduce the adverse
action set forth therein and adopt the balance of the proposed
decision.
   (c) If the proposed decision is not remanded or adopted as
provided in subdivision (b), each party shall be notified of the
action, and the board itself may decide the case upon the record,
including the transcript, with or without taking any additional
evidence, or may refer the case to the same or another authorized
representative to take additional evidence.  If the case is so
assigned to an authorized representative, he or she shall prepare a
proposed decision as provided in subdivision (b) upon the additional
evidence and the transcript and other papers that are part of the
record of the prior hearing.  A copy of the proposed decision shall
be furnished to each party.  The board itself shall decide no case
provided for in this subdivision without affording the parties the
opportunity to present oral and written argument before the board
itself.  If additional oral evidence is introduced before the board
itself, no board member may vote unless he or she heard the
additional oral evidence.
   (d) In arriving at a decision or a proposed decision, the board or
its authorized representative may consider any prior suspension or
suspensions of the appellant by authority of any appointing power, or
any prior proceedings under this article.
   (e) The decision shall be in writing and contain findings of fact
and the adverse action, if any.  The findings may be stated in the
language of the pleadings or by reference thereto.  Copies of the
decision shall be served on the parties personally or by mail.
   (f) This section shall not apply to minor discipline, as defined
in a memorandum of understanding or by Section 19576.5, for state
employees in State Bargaining Unit 8.
   (g) This section shall not apply to state employees in State
Bargaining Unit 11 who have been disciplined for positive drug test
results and who expressly waive appeal to the State Personnel Board
and invoke arbitration proceedings pursuant to a collective
bargaining agreement.
  SEC. 9.  Section 19816.20 of the Government Code is amended to
read:
   19816.20.  Notwithstanding Section 18717, this section shall apply
to state employees in state bargaining units that have agreed to
these provisions in a memorandum of understanding between the state
employer and the recognized employee organization, as defined in
Section 3513, state employees who are excluded from the definition of
"state employee" in paragraph (c) of Section 3513, and officers or
employees of the executive branch of state government who are not
members of the civil service.
   (a) The department shall determine which classes or positions meet
the elements of the criteria for the state safety category of
membership in the Public Employees' Retirement System.  An employee
organization or employing agency requesting a determination from the
department shall provide the department with information and written
argument supporting the request.
   (b) The department may use the determination findings in
subsequent negotiations with the exclusive representatives.
   (c) The department shall not approve safety membership for any
class or position that has not been determined to meet all of the
following criteria:
   (1) In addition to the defined scope of duties assigned to the
class or position, the member's ongoing responsibility includes:
   (A) The protection and safeguarding of the public and of property.

   (B) The control or supervision of, or a regular, substantial
contact with one of the following:
   (i) Inmates or youthful offenders in adult or youth correctional
facilities.
   (ii) Patients in state mental facilities that house Penal Code
offenders.
                                                               (iii)
Clients charged with a felony who are in a locked and controlled
treatment facility of a developmental center.
   (2) The conditions of employment require that the member be
capable of responding to emergency situations and provide a level of
service to the public such that the safety of the public and of
property is not jeopardized.
   (d) For classes or positions that are found to meet this criteria,
the department may agree to provide safety membership by a
memorandum of understanding reached pursuant to Section 3517.5 if the
affected employees are subject to collective bargaining, or by
departmental approval for state employees who are either excluded
from the definition of "state employee" in subdivision (c) of Section
3513 or are officers or employees of the executive branch of state
government who are not members of the civil service.  The department
shall notify the retirement system of its determination, as
prescribed in Section 20405.1.
   (e) The department shall provide the Legislature an annual report
that lists the classes or positions which were found to be eligible
for safety membership under this section.
  SEC. 10.  Section 19876.5 of the Government Code is amended to
read:
   19876.5.  State employees in state bargaining units 1, 4, 15, 18,
and 20 who suffer a job-related injury or illness and become eligible
for vocational rehabilitation under Section 139.5 of the Labor Code
on or after January 1, 1993, shall first be subject to an evaluation
to determine what type of state employment can be performed.  The
evaluation shall include vocational rehabilitation when deemed
appropriate, based on a medical evaluation and previous experience.
Disability benefits shall be contingent on the employee's agreement
to cooperate and participate in a reasonable and appropriate
vocational rehabilitation plan necessary to continue state
employment.  This section shall not apply to any job-related or
job-incurred injury or illness that occurs on or after January 1,
2000.
  SEC. 11.  Section 20309.5 is added to the Government Code, to read:

   20309.5.  (a) Any person who is a member of the Defined Benefit
Program of the State Teachers' Retirement Plan and who subsequently
became employed, on or after July 1, 1991, and who continues to be
employed by the state to perform service that requires membership in
the Public Employees' Retirement System under Section 21071 and who
meets the requirements of subdivision (b) of Section 22508.6 of the
Education Code may elect to have his or her state service subject to
coverage by the Defined Benefit Program of the State Teachers'
Retirement Plan and excluded from coverage by the Public Employees'
Retirement System.
   (b) Upon an election being made pursuant to subdivision (a), the
Public Employees' Retirement System shall transfer to the Teachers'
Retirement Fund an amount equal to the actuarial accrued liability of
the system for the service rendered by the person making the
election on or after July 1, 1991, to the date of the election,
inclusive.  The actuarial accrued liability shall be calculated based
on the actuarial assumptions of the system for the most recently
completed actuarial valuation as of the date of the election.
  SEC. 12.  Section 20395 of the Government Code is amended to read:

   20395.  "State peace officer/firefighter member" means all members
who are full-time permanent employees represented in Corrections
Unit No. 6, Protective Services and Public Safety Unit No. 7, and
Firefighters Unit No. 8 and are employed in class titles that are
designated as peace officer as defined in Chapter 4.5 (commencing
with Section 830) of Title 3 of Part 2 of the Penal Code or are
firefighters whose principal duties consist of active
firefighting/fire suppression.
   A member who is employed in a position that is reclassified from
state miscellaneous to state peace officer/firefighter pursuant to
this section, may make an irrevocable election in writing to remain
subject to the miscellaneous service retirement benefit and the
normal rate of contribution by filing a notice of the election with
the board within 90 days of notification by the board.  A member who
so elects shall be subject to the reduced benefit factors specified
in Section 21353 or 21354.1, as applicable, only for service also
included in the federal system.
  SEC. 13.  Section 20405.1 of the Government Code is amended to
read:
   20405.1.  Notwithstanding Section 20405, this section shall apply
to state employees in  state bargaining units that have agreed to
these provisions in a memorandum of understanding between the state
employer and the recognized employee organization, as defined in
Section 3513, state employees who are excluded from the definition of
"state employee" by subdivision (c) of Section 3513, and officers or
employees of the executive branch of state government who are not
members of the civil service.
   (a) On and after the effective date of this section, state safety
members shall also include officers and employees whose
classifications or positions are found to meet the state safety
criteria prescribed in Section 19816.20, provided the Department of
Personnel Administration agrees to their inclusion.  For employees
covered by a collective bargaining agreement, the effective date of
safety membership shall be the date on which the department and the
employees' exclusive representative reach agreement by memorandum of
understanding pursuant to Section 3517.5.  For employees not covered
by a collective bargaining agreement, the Department of Personnel
Administration shall determine the effective date of safety
membership.
   (b) The department shall notify the board as new classes or
positions become eligible for state safety membership, as specified
in subdivision (a), and specify how service prior to the effective
date shall be credited.
   (c) The department shall prepare and submit to the Legislature an
annual report that contains the classes or positions that are
eligible for state safety membership under this section.
   (d) Any person designated as a state safety member pursuant to
this section may elect, within 90 days of notification by the board,
to remain subject to the miscellaneous or industrial service
retirement benefit and contribution rate by filing an irrevocable
election with the board.  A member who so elects shall be subject to
the reduced benefit factors specified in Section 21076, 21353, or
21354.1, as applicable, only for service also included in the federal
system.
  SEC. 14.  Section 20407.5 is added to the Government Code, to read:

   20407.5.  (a) Notwithstanding Section 20407, any person designated
as a state safety member pursuant to Section 20407 who elected to
remain subject to the miscellaneous service retirement benefit and
contribution rate as provided in that section may elect instead to be
subject to the state safety service retirement benefit and
contribution rate.
   (b) This section shall apply to those officers and employees of
the State Department of Mental Health described in Section 20407 who
are represented by State Bargaining Unit 18 and who became safety
members effective January 1, 1998, when the Napa State Hospital and
the Metropolitan State Hospital were designated as forensic
facilities.
   (c) This section shall also apply to any member who is excluded
from the definition of state employee in subdivision (c) of Section
3513 and who is directly associated with employees represented by
State Bargaining Unit 18.
   (d) The election provided under this section shall be filed with
the board by the member within 90 days after notification by the
board that the member has the right to elect to be subject to the
state safety member service retirement formula and contribution
rates.  If the election is not made by the member, he or she shall
remain subject to the miscellaneous service retirement benefit and
contribution rate.
  SEC. 15.  Section 21159 of the Government Code is amended to read:

   21159.  (a) Notwithstanding any other provision of law, a state
member shall not be retired for industrial disability for an illness
or injury that occurs on or after January 1, 1993, unless the member
is incapacitated for the performance of duty in any employment with
the state employer and the disability is of permanent or extended and
uncertain duration, as determined by the Department of Personnel
Administration.  This section shall only apply to state safety, state
industrial, and state miscellaneous members employed in any state
bargaining units for which a memorandum of understanding has been
agreed to by the state employer and the recognized employee
organization to become subject to this section.  The Director of the
Department of Personnel Administration may adopt rules regarding job
placement and other related activities necessary for the
administration of this section and Section 21195.
   (b) A state member who, because of the enactment of this section
is no longer eligible to retire for industrial disability and accepts
alternate employment with the state in which the compensation is
less than that received in the position held at the time of the
illness or injury, shall, upon certification of the Department of
Personnel Administration to the board, become entitled to benefits
under the partial disability retirement program set forth in Section
21160.
   (c) The employee shall have the right of appeal to the Department
of Personnel Administration regarding:  (1) the requirement to
participate or (2) the exclusion from participating in the program
described in this section and Section 21160.
   (d) For all other disputes relative to this section and Section
21160, the employee shall seek administrative remedy from his or her
appointing power through the departmental complaint process.
   (e) The appointing power of the affected employee shall reimburse
the Department of Personnel Administration for any costs associated
with the administration of this provision.
   (f) This section shall not apply to any job-related or
job-incurred illness or injury that occurs on or after January 1,
2000.
  SEC. 16.  Section 21160 of the Government Code is amended to read:

   21160.  (a) Any state member who is subject to Section 21159 and
does not qualify for industrial disability retirement under this
part, or is reinstated from industrial disability retirement pursuant
to Section 21195, and accepts another job in state service, shall be
paid a partial disability retirement program benefit payment from
this system in an amount, to be calculated by the Department of
Personnel Administration and certified to the board, that, when added
to the salary earned by the employee in the current state position,
would be equal to the state salary earned by the member at the time
of becoming unable to perform the duties of his or her previous
position.  This supplemental payment shall not result in the member
being deemed to be retired.
   (b) The partial disability retirement program benefit payments
made under this section shall be paid for by the state employer in
the same manner as all other state retirement benefits are funded.
   (c) This section shall not apply to any job-related or
job-incurred illness or injury that occurs on or after January 1,
2000.
  SEC. 17.  Section 21161 of the Government Code is amended to read:

   21161.  (a) A partial disability retirement program is established
by Section 21160 for state employees subject to Section 21159.  The
benefits paid under this program shall be paid pursuant to Sections
21159 and 21160 and shall not be considered compensation for purposes
of Section 20630.
   (b) This section shall not apply to any job-related or
job-incurred illness or injury that occurs on or after January 1,
2000.
  SEC. 18.  Section 21195 of the Government Code is amended to read:

   21195.  (a) Notwithstanding any other section in Article 6
(commencing with Section 21150) or in this article, the Department of
Personnel Administration may reinstate a person who has retired for
industrial disability pursuant to Section 21410, within 12 months
after the effective date of retirement, if it has identified an
available position with duties that the employee is able to perform.
Upon reinstatement, the person shall become entitled to benefits
under the partial disability retirement program pursuant to Section
21160.
   (b) This section shall not apply to any job-related or
job-incurred illness or injury that occurs on or after January 1,
2000.
  SEC. 19.  Section 22754.2 of the Government Code, as added by
Chapter 91 of the Statutes of 1998, is repealed.
  SEC. 20.  Section 22825.01 of the Government Code is amended to
read:
   22825.01.  (a) As used in this section, the following definitions
shall apply:
   (1) A "rural area" means an area in which there is no
board-approved health maintenance organization plan available for
enrollment by state employees or annuitants who live in the area.
   (2) "Coinsurance" means the provision of a medical plan design in
which the plan or insurer and state employee or annuitant share the
cost of hospital or medical expenses at a specified ratio.
   (3) A "deductible" means the annual amount of out-of-pocket
medical expenses that state employees or annuitants must pay before
the insurer or self-funded plan begins paying for expenses.
   (4) "Department" means the Department of Personnel Administration.

   (5) "Program" means the Rural Health Care Equity Program.
   (b) (1) The Rural Health Care Equity Program is hereby established
for the purpose of funding the subsidization and reimbursement of
premium costs, deductibles, coinsurance, and other out-of-pocket
health care costs, which would otherwise be covered if the state
employee or annuitant was enrolled in a board-approved health
maintenance organization plan, paid by employees and annuitants
living in rural areas, as authorized by this section.  The program
shall be administered by the department or by a third-party
administrator approved by the department in a manner consistent with
all applicable state and federal laws.  The board shall determine the
rural area for each subsequent fiscal year at the same meeting when
the board approves premiums for health maintenance organizations.
   (2) Separate accounts shall be maintained within the program for
(A) employees, as defined in subdivision (c) of Section 3513; (B)
excluded employees, as defined in subdivision (b) of Section 3527;
and (C) annuitants as defined in subdivision (e) of Section 22754.
   (c) Moneys in the Rural Health Care Equity Program shall be
allocated to the separate accounts as follows:
   (1) As the employer's contribution with respect to each employee,
as defined in subdivision (c) of Section 3513, who lives in a rural
area and who is otherwise eligible, an amount to be determined
through the collective bargaining process.
   (2) As the employer's contribution with respect to each excluded
employee, as defined in subdivision (b) of Section 3527, who lives in
a rural area and who is otherwise eligible, an amount equal to, but
not to exceed, the amount given to eligible state employees, as
defined in subdivision (c) of Section 3513, who live in a rural area.

   (3) As the employer's contribution with respect to each annuitant,
as defined in subdivision (e) of Section 22754, who lives in a rural
area, is not a Medicare participant, and who is otherwise eligible,
an amount not to exceed five hundred dollars ($500) per year.
   (4) As to the state's contribution with respect to each state
annuitant, as defined in subdivision (e) of Section 22754 who lives
in a rural area, participates in a board-approved,
Medicare-coordinated health plan, participates in a board-approved
health plan, and is otherwise eligible, an amount equal to the
Medicare Part B premiums incurred by the annuitant, not to exceed
seventy-five dollars ($75) per month.  The state shall not reimburse
for penalty amounts.
   (5) As to an employee who enters state service or leaves state
service during a fiscal year, contributions for the employee shall be
made on a pro rata basis.  A similar computation shall be used for
anyone entering or leaving the bargaining unit, including a person
who enters the bargaining unit by promotion in mid-fiscal year.
   (d) Each fund of the State Treasury, other than the General Fund,
shall reimburse the General Fund for any sums allocated pursuant to
subdivision (c) for employees whose compensation is paid from that
fund.  That reimbursement shall be accomplished using the following
methodology:
   (1) On or before December 1 of each year, the Department of
Personnel Administration shall provide a listing of active state
employees who participated in the Rural Health Care Equity Program in
the immediately preceding fiscal year to each employing department.

   (2) On or before January 15 of each year, every department that
employed an active state employee identified by the Department of
Personnel Administration as a participant in the Rural Health Care
Equity Program shall provide the Department of Personnel
Administration with a listing of the funds used to pay each employee'
s salary, along with the proportion of each active state employee's
salary attributable to each fund.
   (3) Using the information provided by the employing departments,
the Department of Personnel Administration shall compile a listing of
Rural Health Care Equity Program payments attributable to each fund.
  On or before February 15 of each year, the Department of Personnel
Administration shall transmit this list to the Department of Finance.

   (4) The Department of Finance shall certify to the Controller the
amount to be transferred from the unencumbered balance of each fund
to the General Fund.
   (5) The Controller shall transfer to the General Fund from the
unencumbered fund balance of each impacted fund the amount specified
by the Department of Finance.
   (6) To ensure the equitable allocation of costs, the Director of
the Department of Personnel Administration or the Director of Finance
may require an audit of departmental reports.
   (e) For any sums allocated pursuant to subdivision (c) for
annuitants, funds, other than the General Fund, shall be charged a
fair share of the state's contribution in accordance with the
provisions of Article 2 (commencing with Section 11270) of Chapter 3
of Part 1 of Division 3 of Title 2.  On or before July 31 of each
year, the Department of Personnel Administration shall provide the
Department of Finance with the total costs allocated pursuant to
subdivision (c) for annuitants in the immediately preceding fiscal
year.  The reported costs shall not include expenses that have been
incurred but not claimed as of July 31.
   (f) Notwithstanding any other provision of law and subject to the
availability of funds, moneys within the Rural Health Care Equity
Program shall be disbursed for the benefit of an employee who lives
in a rural area and who is otherwise eligible.  The disbursements
shall, where there is no board-approved health maintenance
organization plan available in an area that is open for enrollment
for the employee, (1) subsidize the preferred provider plan premiums
for the employee, by an amount equal to the difference between the
weighted average of board-approved health maintenance organization
premiums and the lowest board-approved preferred provider plan
premium available under this part and (2) reimburse the employee for
a portion or all of his or her incurred deductibles, coinsurances,
and other out-of-pocket health-related expenses, that would otherwise
be covered if the employee were enrolled in a board-approved health
maintenance organization plan.
   These subsidies and reimbursements shall be provided according to
a plan determined by the department, which may include, but is not
limited to, a supplemental insurance plan, a medical reimbursement
account, or a medical spending account plan.
   (g) Notwithstanding any other provision of law and subject to the
availability of funds, moneys within the Rural Health Care Equity
Program shall be disbursed for the benefit of eligible annuitants, as
defined in subdivision (e) of Section 22754, who live in rural areas
and who are otherwise eligible.  The disbursements shall, where
there is no  board-approved health maintenance organization plan
available and open to enrollment by the annuitant, either (1)
reimburse the annuitant if he or she is not a Medicare participant,
for some or all of his or her deductibles, not to exceed five hundred
dollars ($500) per fiscal year, or (2) reimburse Medicare Part B
premiums incurred by the annuitant, not to exceed seventy-five
dollars ($75) per month, exclusive of penalties.  These
reimbursements shall be provided by the department.
   The state shall not reimburse for penalty amounts.
   (h) Any moneys remaining in any account of the program at the end
of any fiscal year shall remain in the account for use in subsequent
fiscal years until the account is terminated.  Moneys remaining in
any account of the program upon termination, after payment of all
outstanding expenses and claims incurred prior to the date of
termination, shall be deposited in the General Fund.
   (i) The Legislature finds and declares that the Rural Health Care
Equity Program is established for the exclusive benefit of employees,
annuitants, and family members.
   (j) This section shall cease to be operative on January 1, 2005,
or on such earlier date as the board makes a formal determination
that HMOs are no longer the most cost-effective health care plans
offered by the board.
  SEC. 21.  Section 10295 of the Public Contract Code is amended to
read:
   10295.  (a) All contracts entered into by any state agency for (1)
the acquisition of goods or elementary school textbooks, (2)
services, whether or not the services involve the furnishing or use
of goods or are performed by an independent contractor, (3) the
construction, alteration, improvement, repair, or maintenance of
property, real or personal, or (4) the performance of work or
services by the state agency for or in cooperation with any person,
or public body, are void unless and until approved by the department.
  Every contract shall be transmitted with all papers, estimates, and
recommendations concerning it to the department and, if approved by
the department, shall be effective from the date of the approval.
   (b) This section applies to any state agency that by general or
specific statute is expressly or impliedly authorized to enter into
transactions referred to in this section.
   (c) This section does not apply to the following:
   (1) Any transaction entered into by the Trustees of the California
State University or by a department under the State Contract Act or
the California State University Contract Law.
   (2) Any contract of a type specifically mentioned and authorized
to be entered into by the Department of Transportation under Section
14035 or 14035.5 of the Government Code, Sections 99316 to 99319,
inclusive, of the Public Utilities Code, or the Streets and Highways
Code.
   (3) Any contract entered into by the Department of Transportation
that is not funded by money derived by state tax sources but, rather,
is funded by money derived from federal or local tax sources.
   (4) Any contract entered into by the Department of Personnel
Administration for state employee benefits, occupational health and
safety, training services, or combination thereof.
   (5) Any contract let by the Legislature.
   (6) Any contract entered into under the authority of Chapter 4
(commencing with Section 11770) of Part 3 of Division 2 of the
Insurance Code.
  SEC. 21.5.  Section 10295 of the Public Contract Code is amended to
read:
   10295.  (a) All contracts entered into by any state agency for (1)
the acquisition of goods or elementary school textbooks, (2)
services, whether or not the services involve the furnishing or use
of goods or are performed by an independent contractor, (3) the
construction, alteration, improvement, repair, or maintenance of
property, real or personal, or (4) the performance of work or
services by the state agency for or in cooperation with any person,
or public body, are void unless and until approved by the department.
  Every contract shall be transmitted with all papers, estimates, and
recommendations concerning it to the department and, if approved by
the department, shall be effective from the date of the approval.
   (b) This section applies to any state agency that by general or
specific statute is expressly or impliedly authorized to enter into
transactions referred to in this section.
   (c) This section does not apply to the following:
   (1) Any transaction entered into by the Trustees of the California
State University, by the Board of Governors of the California
Community Colleges, or by a department under the State Contract Act
or the California State University Contract Law.
   (2) Any contract of a type specifically mentioned and authorized
to be entered into by the Department of Transportation under Section
14035 or 14035.5 of the Government Code, Sections 99316 to 99319,
inclusive, of the Public Utilities Code, or the Streets and Highways
Code.
   (3) Any contract entered into by the Department of Transportation
that is not funded by money derived by state tax sources but, rather,
is funded by money derived from federal or local tax sources.
   (4) Any contract entered into by the Department of Personnel
Administration for state employee benefits, occupational health and
safety, training services, or combination thereof.
   (5) Any contract let by the Legislature.
   (6) Any contract entered into under the authority of Chapter 4
(commencing with Section 11770) of Part 3 of Division 2 of the
Insurance Code.
  SEC. 22.  The Legislature hereby declares its intent that Sections
19876.5, 21159, 21160, 21161, and 21195 of the Government Code, as
amended by this act, shall be given retroactive effect to January 1,
2000.
  SEC. 23.  The sum of sixty-five million four hundred fourteen
thousand two hundred eighty-eight dollars ($65,414,288) is hereby
appropriated as follows:
   (a) Five million dollars ($5,000,000) from the General Fund to the
Controller for allocation to the Work and Family Fund, a
continuously appropriated fund, for expenditure by the Department of
Personnel Administration for the purposes of establishing and
maintaining work and family programs for state employees.  These
programs may include, but are not limited to, financial assistance to
aid in the development of child care centers administered by either
nonprofit corporations formed
   by state employees or child care providers, or to provide grants,
subsidies, or both grants and subsidies for child care and elder
care.  Other programs may include enhancement or supplementation of
existing employee assistance program services and other work and
family programs.
   (b) Forty-seven million six hundred thousand dollars ($47,600,000)
from unallocated special funds for expenditure in the 1999-2000
fiscal year in augmentation and for the purposes of state employee
compensation as provided in Item 9800-001-0494 of Section 2.00 of the
Budget Act of 1999 (Chapter 50, Statutes of 1999).
   (c) Twelve million six hundred thirty-nine thousand two hundred
eighty-eight dollars ($12,639,288) from the General Fund to the
Department of Personnel Administration for the purpose of funding the
Rural Health Care Equity Program, as established by Section 22825.01
of the Government Code, as added by Chapter 743 of the Statutes of
1999.
   The funds appropriated pursuant to this subdivision shall be used
for the subsidization and reimbursement of premium costs,
deductibles, coinsurance, and other out-of-pocket health care costs
of active state employees and annuitants living in rural areas.  The
funds appropriated by this subdivision shall be available for
expenditure until January 1, 2005.
   (d) The sum of one hundred seventy-five thousand dollars
($175,000) from the General Fund in augmentation of Item
8380-001-0001 of Section 2.00 of the Budget Act of 1999 (Chapter 50
of the Statutes of 1999).  The funds appropriated pursuant to this
subdivision shall be used to contract with a third-party
administrator to provide recordkeeping services for the Rural Health
Care Equity Program, as established by Section 22825.01 of the
Government Code, as added by Chapter 743 of the Statutes of 1999.
  SEC. 24.  Section 21.5 of this bill incorporates amendments to
Section 10295 of the Public Contract Code proposed by both this bill
and AB 1441.  It shall only become operative if (1) both bills are
enacted and become effective on or before January 1, 2001, but this
bill becomes operative first, (2) each bill amends Section 10295 of
the Public Contract Code, and (3) this bill is enacted after AB 1441,
in which case Section 10295 of the Public Contract Code, as amended
by Section 21 of this bill, shall remain operative only until the
operative date of AB 1441, at which time Section 21.5 of this bill
shall become operative.
  SEC. 25.  This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect.  The facts constituting the necessity are:
   In order that the provisions of this act relating to state
employees may become effective at the earliest possible time, it is
necessary that this act go into immediate effect.
